Welcome to the fourth quarter and year-end 2026 earnings conference call for Acme United Corporation. We are also subject to additional risks and uncertainties as described in our periodic filings with the Securities and Exchange Commission in our current earnings release. Our net sales were $196.5 million, net income was $10.2 million, and earnings per share were $2.49. We had purchased extra inventory at the end of 2024 in anticipation of some increased tariff levels and supplied our regular customers with their planned orders.
This product senses components that were used, lost, or became obsolete in an industrial first aid kit and automatically generates replenishment orders. These investments in the recurring portion of our first aid business are generating savings and improving product quality. We installed new software to optimize inventory placement in our large warehouse in Rocky Mount, North Carolina. Sales of Hawktree Solutions, which was acquired out of bankruptcy in late 2023, exceeded our expectations.
We acquired a direct-to-consumer supplier of cutting and sharpening tools in October 2025. In our first aid segment in Europe, we expanded the marketing and sales team, improved product sourcing costs, and began to expand aggressively. As we move into 2026, we see growth in our first aid and medical segments and a return to more normal merchandising and promotion in the retail market. Acme's net sales for the fourth quarter were $47.5 million compared to $45.9 million in 2024, an increase of 3%.
| Metric | Period | Current guidance |
|---|---|---|
| First aid and medical segments | 2026 | Growth expected |
| Retail / Westcott promotions | 2026 | Return to more normal merchandising and promotional activity expected |
| My Medic | 2026+ | To be integrated carefully; expand direct-to-consumer and selectively into retail, leveraging Acme sourcing and distribution |
| Spill Magic (Mt. Pleasant, TN) | Q1 2026 | Moving into the new facility in Q1 2026 with newly purchased automated equipment |
| Metric | YoY | Note |
|---|---|---|
| Full-year net sales | +1% (to $196.5M) | Record sales; first aid/medical strength offset weaker cutting-tool promotions. |
| Full-year net income / EPS | +2% ($10.2M / $2.49) | Record earnings despite tariff headwinds. |
| Q4 net sales | +3% (to $47.5M) | Growth led by Europe (+22% LC) and Canada (+14% LC), including the German cutting acquisition. |
| Q4 net income / EPS | +10% / +12% ($1.9M / $0.46) | Operating profit up 27% and lower interest expense. |
| Europe (local currency) | +22% Q4 / +4% FY | Additional sales from the October 2025 German cutting-and-sharpening acquisition plus base cutting share gains. |
| Canada (local currency) | +14% Q4 / +16% FY | Strong first aid product sales and e-commerce expansion, partly offset by lower school/office sales. |
| Q4 gross margin | 38.2% vs 38.7% | Tariff-related cost pressure; full-year margin essentially flat at 39.4%. |
| Net bank debt | $18.5M vs $21.5M | $13M free cash flow before the $6M Tennessee purchase; $2.3M dividends and $1.6M German acquisition paid during the year. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Tariff response and global sourcing | 145% China tariffs in April 2025 | When China tariffs fell to 30% in late April, Acme put over 50 containers on the water within days, opened new factories in Vietnam, Thailand and Malaysia, increased production in India and Egypt, negotiated cost and freight reductions and raised prices modestly. | — |
| My Medic acquisition | — | Acquired the leading U.S. direct-to-consumer supplier of advanced first aid and bleed-control products (~$19M revenue, 500,000+ social followers) for $18.7M; net out-of-pocket ~$14M after a ~$1M earn-out and ~$3M holdback; to be integrated carefully with selective retail expansion. | — |
| Domestic manufacturing and automation | Investing in Med-Nap and robotics | Invested in robotics at three U.S. sites for refill assembly, purchased a 78,000-sq-ft Spill Magic plant in Mt. Pleasant, TN (~$6M), added automated processing equipment, and continued building out Med-Nap in Florida with a microbiology lab and expanded QA to serve the broader U.S. medical market. | — |
| Product innovation | — | Launched a patented automatic replenishment system that senses used or missing first aid components and auto-generates refill orders (customers save 30%-50% versus van-based delivery); Westcott expanded share in the craft market using patented non-stick and ceramic technology. | — |
| Acquisition strategy | Opportunistic, self-generated deals | Focus on horizontal expansion in first aid/medical (buying competitors, broadening into pre-hospital emergency products) and potential vertical component suppliers like Med-Nap. | — |